Ronnie05's Blog

Indian Telecom Story (Part XXIX):3G/BWA begins

Posted in Industry updates by Manas Ganguly on March 21, 2010

Over 2 and a half years after it was originally announced the 3G and BWA auctions finally seem to be underway with the March 19th deadline of bids of 3G and the March 21st bids of BWA spectrum being invited.

The reserve price for pan-India 3G spectrum is Rs 3,500 crore and for the BWA auctions, the reserve price is Rs 1,750 crore.

Predictably, the 3G auctions have attracted the existing 2G players with not even a single entrant:global or Indian in the list.The absence of global bidders is likely to ensure that the bidding will be conservative, and probably lower than the ambitious Rs 40,000 crore revenue target first announced by telecom minister A Raja. The BWA list has four new players — Augere, Tikona Wireless, Infotel Broadband Services and Qualcomm — while Spice is making a comeback into the telecom space.

However, the data revenue growth in the near term is not expected to be robust enough to justify extravagant bidding by the players. Given the absence of foreign players and an uncertain return mathematics, the mechanics of aggressive bidding will not be a part of the process.

The positive to all this is that Mobile VAS companies and the apps developer comunity in India which has been in an impoverished state for long, will find sudden traction given that all and most of these companies will try to maximize on revenues from the data stream. Airtel has sshown the way with 2.5 million downlaods of its Apps from its month old Apps store. Monetizing VAS downloads is going to be a different thing altogether.

There are those like MTS, Uninor and others who havent bid for 3G. Going forward there would a question of the seriousness of their efforts and commitment to the Indian Markets. We will watch the play here.

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